Shortening the Settlement Cycle (SSC)

Background

AEMO is implementing the SSC reform following the Australian Energy Market Commission’s final determination, made on 12 December 2024. The change was made in response to Globird Energy’s rule change request to shorten the settlement cycle.

The changes reduce prudential collateral held by AEMO to cover accrued liabilities (typically of retailers) in the NEM, i.e. unpaid settlement amounts. Lowering working capital requirements for small retailers in particular, would lower barriers to market entry and support increased investment in service innovation and more competition. This should benefit consumers through access to more choice and better service offerings.

Scope

The final rule shortens the national electricity market (NEM) settlement cycle to nine business days following the end of a billing period and introduces a new revision 20 business days following the end of the billing period.

The final rule will commence at the start of billing week 32 on 9 August 2026. 

High-Level Implementation Assessment (HLIA)  

AEMO published a draft High-Level Implementation Assessment of the SSC reform for consultation in September 2024 as part of the implementation process under the NEM Reform Program. It provides an indicative and preliminary view to participants on how the SCC draft rule may be implemented by AEMO. It outlines the proposed system, data exchange, process and operational changes and the indicative timeline that would likely be required to give effect to the draft SSC rule. This HLIA also provides a general assessment of what these changes may mean for NEM participants.

Any feedback or submissions related to the rule change or draft determination should be provided to the AEMC as part of its rule change process.

Industry engagement

This initiative forms part of NEM Reform Program and market participants can get involved by visiting:

Further information

For more information, please contact NEMReform@aemo.com.au.